Melbourne’s property market is rapidly evolving. Traditional single-dwelling strategies are being replaced by smarter, space-efficient, income-generating solutions – and at the centre of this shift are high-yield second dwellings. Whether you’re an experienced investor or a homeowner looking to tap into rental income, granny flats and other secondary dwellings are proving to be a goldmine.

This in-depth guide explores how granny flats for property investors are transforming the real estate landscape across Victoria, and how you can capitalise on this trend.

The Rise of Second Dwellings in Melbourne

Victoria’s urban sprawl, growing demand for affordable housing, and tightening rental markets have created the perfect conditions for second dwellings. These include:

• Detached granny flats
• Dual-occupancy units
• Tiny homes and DPUs (Dependent Person Units)

Investors are capitalising on this shift by adding small, self-contained dwellings to their existing land, creating dual income streams from one property.

What Makes Granny Flats High-Yield Investments?

The term “high-yield second dwellings” isn’t just marketing fluff – in the right location, with the right design, rental returns of 10% or more are absolutely achievable.

Here’s why:

1. Dual Income from One Title

You can rent out both the main home and the granny flat, significantly increasing gross yields.

2. Lower Build Costs, Faster Payback

Building a second dwelling like Innovista’s Lana 60 (2-bed, 1-bath) costs under $210K. Compare that to buying a second investment property – this option is faster and more capital-efficient.

3. Strong Rental Demand

Melbourne’s rental vacancy rates are low. With more families needing affordable, self-contained housing, demand for these units is strong.

4. Multi-use Flexibility

Granny flats appeal to long-term tenants, elderly parents, students, or even short-stay guests. The more uses you have, the lower your vacancy risk.

Where Are Investors Seeing the Best Returns?

The most profitable suburbs are typically within 50–150km of Melbourne CBD. Areas like Werribee, Craigieburn, Pakenham, and Melton are prime for second dwelling strategies due to:

• Available block sizes
• High tenant demand
• Local council support for dual occupancy
  

Innovista Group actively assesses zoning and feasibility during the design stage to ensure your second dwelling is compliant, rentable, and high-yield.

The Smart Way to Maximise Returns

Not all granny flats are created equal. To truly benefit from high-yield second dwellings, you need to think like a property strategist:

• Design to maximise tenant privacy
• Incorporate energy efficiency (7-star minimum)
• Include full kitchens, laundries, and bathrooms
• Build with long-term durability and low maintenance in mind

Innovista’s Signature and Luxe packages are designed with investors in mind. From low-maintenance cladding to high-demand features like private entries, reverse cycle air con, and stylish finishes – every detail supports long-term yield.

Granny Flats vs. Buying Another Property

Feature	Second Dwelling	Investment Property
Entry Cost	~$210K	$650K–$950K
Rental Income	$400–$600/week	$500–$850/week
Stamp Duty	$0 (same title)	$25K–$45K+
Depreciation Benefits	Yes	Yes
ROI Potential	High	Moderate

Final Thoughts: Build Smarter, Not Bigger

If you’re looking to grow your investment portfolio with less risk, lower capital, and more flexibility, high-yield second dwellings are your best move. With demand increasing and rental returns on the rise, now’s the time to futureproof your property with a quality granny flat.

Ready to maximise rental returns?
Speak to Innovista Group today – Melbourne’s go-to builder for compliant, high-return granny flats.